PORT ST. JOE, Fla. — The St. Joseph Peninsula is picture-perfect Florida: 17 miles of sugar sand beach interrupted by a few clusters of homes, each with a million-dollar view of the Gulf of Mexico.

But according to state officials, the peninsula on Florida's Panhandle cradles the state's most rapidly eroding beach – and replenishing the sand is costing state and local taxpayers millions of dollars. There is also a movement to change a 30-year-old environmental designation that would make sand replenishment projects at St. Joseph eligible for federal money, shifting some of the burden to Washington.

Hundreds of other beaches around the country share that designation under a law called the Coastal Barrier Resources Act, which is meant to discourage development and protect fragile ecology. Some have tried to shed the designation, but few have been successful.

Beach replenishment is common in Florida. Fifty-nine percent of the state's beaches are experiencing erosion, partly because of tides and storms and partly because of development. But there is debate over whether replenishment is cost-effective and environmentally sound.

Proponents say the process is critical to Florida's success as a tourism mecca, maintaining the wide beaches that visitors expect and that protect coastal property from storms, tides and waves. But others, including environmentalists, say erosion is a problem only because structures were built too close to the water. Taxpayers shouldn't bail out failed beaches just to preserve wealthy owners' investments, they say.

Jill Davis, the owner of Scallop Cove, a gas station, bait shop and convenience store on the St. Joseph Peninsula, said that without beach replenishment, tourists would stay away and the area's economy would suffer.

"That's our livelihood out here," she said. "Beaches are what draw people out here. Everything here is based on tourism and the beach, fishing, scalloping. We need that property."

During a typical beach replenishment project, dredgers collect underwater sand offshore and pipe it onto the beach. Bulldozers move the sand around until the beach looks natural. A few years later when beach is again eroded, the process is repeated. Local, state and federal entities now manage over 200 miles of restored Florida beaches, spending about $100 million annually on replenishment projects in the state.

But environmentalists say the process is an artificial solution to a manmade problem.

"These beaches have been here for thousands of years and nobody renourished them. They just naturally kept themselves wide and beautiful," said Christian Wagley, an environmentalist who lives on the Florida Panhandle. "The problem comes when we come and draw that line in the sand and put that building there that won't move, next to a beach that has to move in order to survive and be healthy."

While battles over beach replenishment are common around Florida, the situation on St. Joseph Peninsula is unusual because it gets hit frequently by storms and because of the currents around its location at the crook of Florida's elbow. About 40 feet of shoreline erodes every year, according to the state Department of Environmental Protection. The 127-year-old Cape San Blas lighthouse, which is on land owned by Eglin Air Force Base, has been moved twice because the land beneath it was eroding.

The pristine St. Joseph's Peninsula is not a popular, Spring Break-style beach. There are only a few dozen homes – many of them rentals – and even at its summer tourist peak, it's never as crowded as other beaches around the state.

The first replenishment there was approved in 2007 and finished in 2009 – and there hasn't been any maintenance since. Gulf County residents voted in 2008 to raise their own taxes to help pay for the $22 million project, collecting about $10 million. State officials say a quarter of the sand has been lost since renourishment, particularly at the peninsula's southern end.

The county is trying to persuade Congress and the Obama administration to give $15 million for the replenishment, but that's blocked the Coastal Barrier Resources Act.

It was enacted by Congress in 1982 to protect places that serve as buffers against wind and storms. The 585 CBRA areas nationwide are ineligible for federal funding that promotes development because they are considered fragile, high-risk, and ecologically sensitive. The designation can limit federal money for rebuilding roads or other restoration work.

Houses and businesses can be developed in these areas if property owners are willing to pay to rebuild if a storm hits. Many of the areas are pristine with little development.

Gulf County wants the designation removed from St. Joseph Peninsula, arguing that if the beach isn't maintained, then people won't buy waterfront property – which accounts for about 25 percent of the county's tax revenue. The entire county only has about 14,000 residents.

"You can't comprehend how frustrating this is," said county Commissioner Warren Yeager, who's traveled to Washington to lobby Congress for help.

On March 7, U.S. Rep. Steve Southerland, R-Fla., introduced a bill in the House to remove the CBRA designation for St. Joseph's Peninsula.

"This inequity in the law forces Gulf County homeowners to purchase private sector insurance at a much higher rate, if they are able to obtain coverage at all," Southerland wrote in a news release.

North Topsail Beach in North Carolina is also lobbying Congress to remove its designation. The process is lengthy, and few areas have been successful.

If Gulf County fails, it could pursue drastic measures to recoup any lost taxes. Yeager said zoning regulations could be revised to allow more homes near the sand.

But environmentalists are opposed to removing the CBRA designation or using federal money for beach replenishment there. They say locals should pay for it themselves and that removing the designation would waste money.

Gary Appleson, the policy coordinator for the Sea Turtle Conservancy in Gainesville, said replenishment can be dangerous for sea turtles that sometimes get caught in suction from the machines that pump sand from the Gulf floor. He said Gulf County has some of the highest numbers of turtle nests on the Panhandle, with 240 found in 2010.

"They want to subsidize the risks of some of the riskiest development in the state of Florida. We believe that what is happening on St. Joseph Peninsula is perpetually subsidized beach replenishment. It's the poster child of failed coastal management policy in Florida," Appleson said.

He said that unlike successful replenishment projects in areas such as Clearwater Beach and Miami Beach, the process isn't tenable at storm-prone St. Joseph.

"The only way that beach replenishment would work long term on the St. Joseph Peninsula is that if we have no more costal storms and no hurricanes hit the Gulf," he said.